Change Com aims to build bridges between developed and emerging markets and Change Com’s effort focuses on early stage investment and entrepreneurship.
We believe that entrepreneurship and startups are a driving force behind the creation of new ideas, new technologies and products that will contribute to narrowing the gap. Africa and the rest of the world need change and we believe that entrepreneurs will play a crucial role in creating that change. Trade, a fair market economy, governed by transparency and accountability, drives prosperity.
So why Africa now?
Africa has a lot of investment opportunities and we think timing is right for taking a closer look at some markets on continental Africa. Several countries in the world ranked with the highest economic growth are in Africa (LinkedIn reports 7 out of 10). The youngest population in the world is in Africa (19,2 years according to Worldometer).
Several African countries are experiencing robust economic growth, with specific sectors rapidly expanding due to urbanization, a youthful population, and rising consumer demand. The continent is also experiencing a technology revolution, particularly in mobile applications, fintech, mobile banking, and e-commerce, leading to a surge of startups and innovative tech companies. Today, basic services such as banking, insurance, internet access still have low penetration and are expected to significantly grow in the coming years.
Moreover, Africa is abundant in natural resources, and investing in these sectors can yield substantial returns, especially as global demand for these resources continues to grow.
Investing in African markets carries inherent risks; however, early engagement will offer a unique competitive edge as these economies evolve. This investment not only promises potential financial returns but also plays a crucial role in fostering a brighter future for Africa by tackling significant challenges such as poverty and limited access to essential services.
With a long-term investment strategy and de-risk programs offered by governments, banks and world finance institutions, there a numerous opportunities to make good returns.
Change Com has since 2017 invested in African startups and funds, altogehter a portfolio of 25 investments. We have comitted to invest in industries that ignite our passion and align with our expertise and experience. We specifically focus on startups within the infrastructure sector, targeting areas such as universal access to electricity, financial inclusion through credit access, global internet connectivity, and the empowerment of small and medium-sized enterprises.
We invest primarily in the pre-seed and seed stages. To effectively manage risk, we prioritise collaboration with fellow investors and key players in the startup ecosystem. Our approach includes a comprehensive due diligence processes and actively seeking deal flow from reputable incubators and accelerator programs.
The African early-stage investment ecosystem is still immature, especially in attracting venture capital. In the near future, we expect this to improve as we have seen in Asian markets.
There are certainly many obstacles and hurdles as this is outlined in an Economist article: “Demographic shifts, urbanization, political dynamics, and advancements in consumer technology are driving significant social changes across the continent. However, these transformations are not being matched by economic progress. In fact, African economies are increasingly lagging behind the rest of the world. In 1960, Africa’s GDP per capita, adjusted for purchasing power parity (PPP), was approximately half of the global average. Today, it stands at around a quarter. At that time, the region was comparable to East Asia; now, average incomes in East Asia are seven times higher than those in sub-Saharan Africa” (Source: Economist, “The economic gap between Africa and the rest of the world is growing,” January 6, 2025).
These numbers certainly confirm that since the 1960s things have gone wrong with the development in Africa, but as we write 2025, it may seem that the world has begun to understand that there is a need for a different medicine. Therefore, we believe that the timing is right to join in the revival of the African continent.
Key Ingredients that Change Com believes must be implemented are as follows:
- Promote investment in infrastructure to enhance trade, attract investments, and create job opportunities.
- Promote regional integration and establish a common African market, as current markets remain too fragmented.
- African leaders must abandon outdated economic paradigms and embrace a fair market economy grounded in transparency and accountability.
- Improve access to finance, specifically to empower small and medium sized businesses.
- Foster global partnerships that go beyond one-sided aid, encouraging collaboration among international organisations, educational institutions, and universities.
We recognize that investing in African markets involves certain risks. Investors must navigate bureaucratic hurdles, including complex legal frameworks and potential administrative challenges. Market volatility can also present concerns, as political instability, economic fluctuations, and regulatory changes may heighten perceived risks. Additionally, inadequate infrastructure in many regions can impede business operations and logistics, and fragmented markets can complicate investment strategies.
Despite these challenges, we believe that investors approaching Africa with a long-term perspective can uncover significant opportunities. Many African nations are actively working to enhance their investment climates, signalling a commitment to fostering a more favourable environment for business growth.
To unlock more investment capital for the African continent, we believe that local governments and authorities must set the framework to foster innovation and entrepreneurship:
- Supporting startups and small businesses through incubators, accelerators, and access to funding can drive economic growth. Initiatives that promote entrepreneurship are likely to attract both local and foreign investments.
- Strengthening financial markets: Emerging economies local capital markets are crucial for enhancing access to funding. This involves improving stock exchanges, and promoting venture capital and private equity investments.
- Encouraging public-private partnerships: Governments can collaborate with private investors to finance infrastructure and development projects. This partnership approach leverages private sector expertise and capital while sharing risks.
- Showcasing success stories: Highlighting successful investments and projects can build confidence and attract more capital. Case studies and testimonials can illustrate the potential for returns and the viability of investing in Africa.
- Leveraging diaspora networks: Engaging with the African diaspora offers a significant opportunity for investment capital.
(This article is written based on a Q&A in the film series “Why invest in Arica” made by Thought Leaders Global, curated by Change Com).
